HAI Donations

Articles

Home

Donations

In pursuance of its ideals the Humanist Association of Ireland provides support and representation to people who seek to live full responsible lives without religion, assisting in the provision of secular ceremonies of births, weddings and funerals, publishing the magazine: Humanism Ireland, maintaining an informative website and making constant endeavours to voice the Humanist and secular viewpoint in both the print and broadcast media. In addition, the HAI makes appropriate submissions to Government, organises seminars and workshops and contributes to cultural life.

You can contribute by becoming a member or by making a secure online donation using paypal.

Scheme of Tax Relief for Donations of Money or Designated Securities to "Eligible Charities" and other "Approved Bodies" under Section 848a Taxes Consolidation Act 1997

Information Note for Potential Donors

Introduction

Section 848A Taxes Consolidation Act 1997 provides for a scheme of tax relief for certain "eligible charities" and other "approved bodies" in respect of donations received on or after 6 April 2001.

The Humanist Association of Ireland Ltd (HAI) is recognized as an "eligible charity" by the Revenue Commissioners.

What donations qualify for relief?

The minimum donation in any single year that may be made to the HAI in the form of money or designated securities, or a combination of money and designated securities, must be of a value of €250 or more. Cash donations made in instalments (e.g. Standing Order) also qualify.

There is no maximum qualifying donation amount save that where there is an association between the donor and the HAI at the time the donation is made, e.g. where the donor is an employee or member of the HAI, the relief will be restricted to 10% of the total income of the individual for the relevant year of assessment. Whilst this would apply in relation to members of the HAI, it would not normally have an impact in relation to donations at the lower end of the scale, e.g. a donation of €400. An overall restriction applies to tax relief schemes as introduced by Section 17 of the Finance Act 2006.

A donation must also satisfy the following conditions:

· It must be in the form of money or designated securities or a combination of money and designated securities,

· It must not be repayable,

· It must not confer any benefit on the donor or any person connected with the donor,

· It must not be conditional on, or associated with, any arrangement involving the acquisition of property by the HAI.

Nature of relief

The arrangements for allowing tax relief on donations will depend on whether the donor is (1) a PAYE-only taxpayer or (2) an individual on Self-assessment or (3) a company.

· For a PAYE-only taxpayer, the relief will be given on a "grossed up" basis to the eligible charity or approved body, as the case may be, rather than by way of a separate claim to tax relief by the donor. In other words, the donation will be treated as having been received by the HAI ‘net’ of income tax. If the donation comprises designated securities, the donor must account for any Capital Gains Tax liability to enable the HAI to claim the tax relief.

· In the case of a donation made by an individual who pays tax on a Self-assessment basis, the individual will claim the relief and there is no grossing up arrangement. Similarly, in the case of a donation made by an individual who pays portion of his/her tax under the Self-assessment system but who also pays tax under the PAYE tax system, the individual will claim the relief and there is no grossing up arrangement unless he/she is not deemed a "chargeable person" for Self-assessment purposes.

· In the case of Corporate donations, the company will claim a deduction for the donation as if it were a trading expense; again there is no grossing up arrangement in this case. Examples:
PAYE-only individual

(a) Individual on the standard rate of tax, i.e. 20%:

Individual donates €500 Value of donation to the HAI = €625, i.e. €500 x (100 ÷ 80)

Tax associated with the donation (€625 - €500) = €125

The HAI will therefore be able to claim a repayment of €125 from the Revenue Commissioners at the end of the tax year.

(b) Individual on the higher rate of tax, i.e. 41%Individual donates

€500 Value of donation to the HAI = €847.46, i.e. €500 x (100 ÷ 59)

Tax associated with the donation (€847.46 - €500) = €347.46

The HAI will therefore be able to claim a repayment of €347.46 from Revenue at the end of the tax year.
(Note: In a situation where insufficient tax has been paid to cover the donation made, the refund of tax will be limited to the amount of tax actually paid by the donor. Also, if a taxpayer does not have sufficient tax paid at the higher rate to cover the grossing up of the relevant donation, then the tax relief is restricted at the relevant rates of tax.)
The individual PAYE-only donor must complete an "Appropriate Certificate" - CHY2 Cert - and forward it to Muiris Ó Conchúir, (Dir of Finance, HAI), Ballyell, Tagoat, Co Wexford. This will allow the HAI to claim the grossed up amount of tax associated with the donation.

Options for making payment:

- Attach to the CHY2 Cert a Cheque, Draft or Postal Order for the full amount being donated for the year in question (made payable to the ‘Humanist Association of Ireland Ltd’, or

- Attach a Standing Order form, indicating instalment payment per month up to December (see HAI details for inclusion on the Membership Form on the HAI website), or

- By PayPal (unless paying the minimum of €250 - here, the PayPal transaction commission would reduce the payment to below €250, making it ineligible under the scheme). If using PayPal for other amounts please select "Donation" and say in your message that the payment relates to the form CHY2 Cert sent separately to the HAI Director of Finance. You may use the general PayPal link at Donations on the HAI website.

Self-assessed individual

Individual on the standard rate, i.e. 20%:

Individual donates €500 and receives tax relief @ 20% (€100). Cost to the taxpayer is €400 and receipt by the HAI is €500 - the self-assessed individual will simply claim a deduction for the donation on his/her tax return, there is no grossing up arrangement and therefore no repayment claim by the HAI arises.

Individual on the higher rate, i.e. 41%:

Individual donates €500 and receives tax relief @ 41% (€205). Cost to the taxpayer is €295 and receipt by the HAI is €500 - again there is no grossing up arrangement and therefore no repayment claim by the HAI arises.

Notes:

1. It is not necessary to be a member of the HAI to make a donation.

2. If you are a HAI member, your donation must be exclusive of your HAI membership payment.

3. There is no formal "closing date". The transaction of the full amount being donated must be completed during the tax year, i.e. between 1^st January and 31^st December. However, it would be advisable not to leave it too near the end of the year.

Corporate donations

Company X donates €1,000 to the HAI:

Assuming a corporation tax rate of 12.5%, relief to the company is €125, i.e. €1,000@12.5%. While the HAI has the benefit of €1,000, the cost to the company of making the donation is only €875 (€1,000 - €125). The company will simply claim a deduction for the donation as if it were a trading expense, there is no grossing up arrangement and therefore no repayment claim by the HAI arises.

Further Information:

You can obtain further information on the Donations Scheme from:

Office of the Revenue Commissioners,

Collector-General’s Division,

Charity Claims Unit,

Government Offices,

Nenagh,

Co. Tipperary

Phone: 067-63400 Ext. 63308/63320/63305 or LoCall 1890 666 333 Ext. 63308 / 63320 / 63305

Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

AND / OR from:

Muiris Ó Conchúir